What’s the difference between a fixed-rate mortgage and a variable-rate mortgage?

Fixed-Rate mortgage, the interest rate is locked in and the monthly payments stay the same for the entire mortgage term. If interest rates go up during the term, you’re protected because your rate stays the same.

Variable-Rate mortgage, the interest rate follows the market and can fluctuate up and down. This allows you to save if current interest rates are high and are trending downwards but there is the risk that if interest rates are low and are trending upwards you will pay more as interest rates go down, more of your payment goes towards the principal. If rates go up, more of your payment goes towards the interest. Your regular payments may stay the same.